Oil India CBM Block (October 18): A Lone Bid in Singrauli Brings OIL Back to Coal Bed Methane

Oil India has gone back to coal bed methane, and it got there without a fight. In a Regulation 30 filing dated October 18, the state-owned explorer said it signed a revenue sharing contract on October 15 for Special CBM block SR-ONHP-(CBM)-2026/1 in the Singrauli coalfield. This Oil India CBM block covers 272.14 sq km, and the company calls the deal a “landmark return” to coal bed methane exploration.

What the Oil India CBM block filing says

Not much beyond the basics, which is the first thing to notice. The press release gives the area, expected coal seam depths of 600 to 800 metres and an average seam thickness of around 40 metres. Petroleum Minister Hardeep Singh Puri, Petroleum Secretary Neeraj Mittal and DGH Director General V. Ponnuraj attended the signing, with Director (Operations) Trailukya Borgohain representing OIL. ETEnergyWorld’s report carries the same details.

What is missing matters more for a shareholder. There is no estimate of gas in place, no spending commitment and no production timeline. So we cannot put a rupee value on this yet, and anyone who does is guessing.

A block nobody else bid for

The back story makes this more interesting. When the bidders list came out in April, a PTI report carried by Fortune India said OIL was the only bidder for the 2026/1 block in the Singrauli coalfield of Madhya Pradesh. The government had offered three blocks in the Special CBM Bid Round 2025 and 13 in the 2026 round, and seven blocks in the 2026 round drew no bids at all. In these rounds, the bidder offering the biggest work programme, meaning the most wells, wins the area.

A single bid cuts both ways. OIL did not have to outbid anyone on work commitments. But it also tells you how few companies wanted this acreage. Reliance and Essar were the most active bidders in those rounds, while ONGC stayed away, according to the same report.

Why CBM has a patchy record in India

On paper the resource is huge. The Petroleum Ministry puts India’s estimated CBM resources at about 2,600 billion cubic metres across 11 states. The ministry’s own page also shows how hard turning that into gas has been: 30 blocks were awarded across four earlier bidding rounds, and established in-place reserves stood at about 280.3 bcm as of April 2018, a small fraction of that headline resource. The PTI report adds that most of the earlier blocks have been, or are being, relinquished because of low prospectivity.

The minister is clearly keen on a fresh push. At an industry event on October 15, Puri said eight contracts had been awarded across the 2025 and 2026 special rounds, as ANI reported via The Tribune. OIL’s block is one of those.

What to watch

For now, this is an option on future gas, not a near-term earnings driver. The useful signals will come later: a work programme, the first exploration wells, and any disclosure of gas in place. Until then, we would read OIL’s results the usual way, on crude and gas output and realisations. Our guide to analysing quarterly results walks through those lines, and our rupee and crude oil review for October covers the commodity backdrop. For another resource company putting money into the ground, see this weekend’s Vedanta zinc expansion story.

Disclaimer: This article is for information and education only and is not investment advice. Please do your own research or consult a SEBI-registered adviser before making any investment decision.